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Just like all the other Central Banks globally who didn't see the GFC coming and don't understand too well the real economy vs their academic modelling, the RBA knows there is something wrong but they can't explain it so they are just desperately dropping rates.

This will not solve the problem, just as none of the previous rate cutting cycles managed to spark wage growth or inflation that they have been predicting incorrectly for so long.

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Here are several things to consider:

Firstly, what you are referring to as cash is not cash. Cash is base money, i.e. commercial bank deposits held in reserve with the CB and all circulating currency. What you are referring to as cash is actually one tier up in the inverted monetary pyramid, i.e. bank deposits, or an loan to the bank for which the investor receives a return in the form of interest payments.

So in the sense of economic agents, you should really consider those people as (very conservative) investors. Savers are people holding their savings in base money or outside the financial system in assets such as physical gold.

With that in mind,

In academic terms there are two "effects", one is "substitution effect" where as interest rates decline, consumers substitute that very conservative investing with spending. The opposite is "income effect" where as interest rates decline, those investors in bank deposits feel the need to invest even more to offset their declining income.

The RBA is desperately betting on the substitution effect dominating, and I say desperately is because all the evidence (as your equity:cash ratio chart plainly shows) is that the income effect has been dominating and there is no evidence (outside academic models with no bearing in reality) to suggest further cuts would spur the substitution effect.

As well as this, another thing to consider is many savers don't invest because they want to get rich, they were investing to see maintenance of the purchasing power of their savings over time. As inflation is so low, the opportunity cost of holding even cash in a shoebox declines proportionally, your savings don't suffer the ravages of inflation as harshly and you gain optionality to invest more aggressively during inevitable bouts of market volatility.